Effects of Omitting Adjustments For the year ending April 30, Safeguard Medical Services Co. mistakenly omitted adjusting entries for (1) $1,700 of supplies that were used, (2) unearned revenue of $8,000 that was earned, and (3) insurance of $10,900 that expired. Indicate the effect of the errors on (a) revenues, (b) expenses, and (c) net income for the year ended April 30. (a) Revenues understated v (b) Expenses understated v (c) Net income overstatedv Feedback V Check My Work Consider, in each situation, if the adjustment involves an expense or a revenue. A quick calculation for this would be to add the revenues not recorded and subtract the expenses not recorded. The difference would be the effect on net income.

Effects of Omitting Adjustments For the year ending April 30, Safeguard Medical Services Co. mistakenly omitted adjusting entries for (1) $1,700 of supplies that were used, (2) unearned revenue of $8,000 that was earned, and (3) insurance of $10,900 that expired. Indicate the effect of the errors on (a) revenues, (b) expenses, and (c) net income for the year ended April 30. (a) Revenues understated v (b) Expenses understated v (c) Net income overstatedv Feedback V Check My Work Consider, in each situation, if the adjustment involves an expense or a revenue. A quick calculation for this would be to add the revenues not recorded and subtract the expenses not recorded. The difference would be the effect on net income.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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